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Harkin-ing Back to Pensions

"Some other interesting tidbits from [Sen. Harkin's proposed USA Retirement Funds] are: [1] The automatic contribution to the USA Retirement Funds would be 3% for employees who are automatically enrolled in 2015 and would increase 1% per year until 2018 at which point it would be fixed at 6%.... [2] If an employee opted out of the automatic contribution, or elected a different percentage, that election would be revoked after 2 years and the employee would be reenrolled at the applicable automatic contribution rate unless he or she took action to change it. [3] Each Fund will be governed by a board of trustees of at least 3 people who are independent of service providers under the fund and meet certain other qualification requirements. [4] Each board of trustees must, among other requirements, establish procedures allowing participants to petition the board to remove a trustee and to comment on the management and administration of the Fund."

DOL Settlement with ING Regarding Trading Error Correction Gains (PDF)

"[It] has been [ING]'s practice to keep the gains resulting from the correction of an error in two instances ... The DOL alleged that [ING]'s failure to disclose its transaction error correction policy resulted in it receiving compensation in violation of ERISA. As part of the settlement, [ING] must make full disclosure of its investment transaction policy to both current and prospective clients who are subject to ERISA... [ING] is further obligated to inform clients that it will track, on an annual basis, the effect the corrections have on each plan[.]"

ING's Penalty for ERISA Claims Procedure Violations Partly Tossed by Ninth Circuit

"[T]he Ninth Circuit held that a benefit plan governed by [ERISA] can't be liable for statutory penalties for failing to follow appropriate claims procedures, because those penalties can be assessed only against plan administrators and not plans themselves. This clarified prior precedent and adopted the views of seven other federal appellate courts. The decision turned on the fact that ERISA plans and the administrators of those plans are distinct legal entities under the statute." [Lee v. ING Groep, N.V., No. 14-15848 (9th Cir. July 25, 2016]

District Court Finds ING to be a Fiduciary Over Revenue Sharing Practices

"[ING Life Ins. and Annuity Co. (ILIAC)] argued that under ERISA section 3(21)(A)(i), its fiduciary status is limited to the extent it actually 'exercises ... discretionary authority' to manage a plan.... [T]he court ... found that such an interpretation of an ERISA fiduciary is too limited ... [and] that ILIAC is a fiduciary under 3(21)(A)(iii) related to its control over the funds.... The second breed of ERISA breach cases involving classes of plans, rather than classes of one plan's participants, are finally progressing to a determination of liability. The potential damages are magnitudes higher, as is the catastrophic harm to a service provider." [Healthcare Strategies et al. v. ING, No. 11-00282-WGY (D.C. Conn. Aug. 5, 2013)]

DOL Settlement Produces $5.2 Million for Retirement Plan Clients of ING

"The U.S. Department of Labor today announced a settlement agreement with ING Life Insurance and Annuity Co. that provides for a $5.2 million payment to certain retirement plan clients adversely affected by its undisclosed practice of keeping investment gains achieved when the company failed to process requested transactions in a timely manner. The department alleged that ILIAC's failure to disclose its policy on reconciling transaction processing errors to retirement plan clients was a violation of [ERISA]."

DOL Calls for Stock Drop Ruling Reversal in ING Case

Excerpt: The DoL lawyers argued in a friend of the court brief that the trial judge was wrong in deciding the the company was mandated to retain the company stock fund as an option in the ING Savings Plan and that the defendants were not fiduciaries with respect to the company stock.

Text of Brief of Secretary of Labor As Amicus Curiae in Support of the Plaintiffs-Appellants v. ING GROEP, N.V., et al.

Excerpt: Whether the district court erred in holding that the defendant plan fiduciaries had no duty to override plan terms mandating investment in stock issued by the employer, ING Groep and its subsidiaries ..., where it would be imprudent to continue to permit investment in employer stock at allegedly inflated prices.

ERISA and the Proposed New Labor Secretary: Look(ing) for the Union Label?

"In contrast to the state of play of the legal rules and their interpretation, a more common thread from administration to administration has been that basic enforcement efforts continue apace. Regardless of whether any particular current administration is perceived as pro- or anti-business, the DOL has continued to pursue the interests of participants and beneficiaries who are faced with allegedly noncompliant plan sponsors, allegedly breaching fiduciaries and the like."

Moench-ing on a Bunch of Presumptions

"On its face, Dudenhoeffer is a significantly negative development for employers with (or considering) ESOPs and for ESOP fiduciaries.... If diversification, reliance on market price and possession of inside information cannot stand as bases for successfully arguing that a fiduciary should have caused the sale of ESOP stock, there may well be a reasonable question as to what's left." [Fifth Third Bancorp v. Dudenhoeffer, No. 12-751 (U.S. June 25, 2014)]

ING Settles ERISA Class Action Lawsuit Over Revenue Sharing Practices

"In total, ILIAC agreed to pay $14,950,000 in damages and agreed to significant changes to its business practices regarding fees and revenue sharing.... The settlement of $14,950,000 represents just 2.33% of the original damages amount and with the plaintiffs' attorneys requesting $6,200,000 (about 42% of the settlement amount) in fees and $615,000 in expenses, this decreases to 1.3%."